Sky Islands, Squirrels, and Scopes: The Political Economy of an Environmental Conflict

Siting conflicts involving endangered species create economic and political pressures on existing property rules. A welfare model of institutional change with endogenous transaction costs is used to analytically describe the environmental conflict surrounding the Mount Graham International Observatory project. Emphasis is placed on the evolution of property rights under conditions of imperfect information. This case study illustrates (a) the nature of scientific and economic incentives for institutional change due to technological innovation and (b) the process of institutional choice in a policy environment characterized by biological uncertainty and economic power.